SOCIALLY INNOVATIVE ENTREPRENEURSHIP IN THE DIGITAL INFORMAL ECONOMY: INSIGHTS FROM THE MALDIVIAN CASE OF SOCIAL COMMERCE

Abstract This study investigates social commerce as a form of socially innovative entrepreneurship in the Maldives, a geographically spread-out Small Island Developing State (SIDS) with limited formal infrastructure and with a massive informal economy. Based on initial survey results of 100 Maldivian consumers, this study discusses how digital platforms, i.e., Viber, Facebook, WhatsApp, and Instagram, are enabling micro-entrepreneurship for the marginalized sectors, mostly women and youth. The research unveils how mechanisms of trust, such as product openness, peer review, and responsiveness of sellers, substitute for formal regulation in an attempt to enable relational commerce grounded on local norms and social rules. Conclusions show that consumers value convenience, flexibility, and customization offered by informal sellers but are anxious about product quality, delivery reliability, and the absence of formal responsibility. The study contributes to emerging literatures on digital informality, inclusive innovation, and entrepreneurship in fragile economies by placing social commerce within embedded innovation rather than transitional deficit. It demonstrates how Maldivian informal entrepreneurs are creating adaptive business models which incorporate technological tools with community trust in efforts to cope with systemic constraints. The research situates these practices within broader SIDS dynamics, underlining the infrastructural function of digital platforms as facilitators of micro-enterprise, and making a conceptual jump towards recognizing informal digital entrepreneurship as strategic, resilient, and socially embedded. Policy advice incorporates light-touch regulation, tiered recognition schemes, and digital capacity-building initiatives that preserve the flexibility and inclusivity of the informal sector while addressing consumer risk and infrastructural deficits.